How To Audit Public Procurement Effectively

Advanced Seminar for Auditors in the Public Sector How to Audit Public Procurement Effectively 22 nd 23 rd October 2015, Berlin With Experts from: United Nations World Food Programme (WFP) European Court of Auditors, Financial Audit European Central Bank, Internal Audit National Audit Office, Performance Audit Division, Sweden General Inspection of Social Affairs (IGAS), France Ministry of Defence, Internal Audit Department, Denmark Brochure 1

ADVANCED SEMINAR How to Audit Public Procurement Effectively Auditors face a unique range of challenges in procurement audits In times of austerity, audits of public procurements have gained in importance. However, practitioners from public administrations often find auditing public procurement processes to be one of the most challenging and complex fields to audit. Misspent public money in low quality services and goods can endanger both the financial and operational integrity of an organisation. Therefore, rigorous audits of procurement and contract management play a key role nowadays in assuring efficiency in public administration. Internal and external auditors have to be well prepared to identify weaknesses and assess the risks in procurements to ensure that money is well spent in public administration. Keep yourself up-to-date and learn from renowned public procurement audit experts To cope with the challenges arising from complex public procurement environments it is essential for auditors to keep themselves informed about auditing tools such as saving methodologies, forensic examination of processes or procurement data analysis. It is necessary to exchange experience and practical knowledge about typical pitfalls and potential misunderstandings in the control of procurements that occurs especially for complex public procurements of particular goods and services, including IT procurement. Learn at this Advanced Seminar how to audit in complicated fields such as public procurement of IT, telecom services, investment banking, health and social affairs, transport and defence. Receive first-hand insights from internal and external audit experts and benefit from their experiences to ensure value for money is secured in the procurement process in your institution. Who is this seminar for? Internal and external auditors Controllers Compliance and evaluation officers Financial, quality and performance managers Project and contract managers Compliance and financial control officers EU Structural Funds (ERDF, ESF) managers Contract services for IPA, ENI, DCI and EDF funded projects Framework contracts officers Audit experts As well as for all contracting authorities and other professionals from: Public administrations on European, national and regional level European and international organisations Development Banks and Agencies Supreme Audit Institutions (SAIs) National and regional institutions managing external and development cooperation and humanitarian aid projects and programmes Public and NGO sector handling projects funded by UN and EU cooperation programmes Public, Private and NGO sector auditing public sector programmes and projects Consultants advising beneficiaries of public contracts Private audit companies serving national, UN and EU beneficiary projects Public procurement is a very risky process. The different topics in the seminar were in good balance with regard to the theoretical and practical approach of the auditing of public procurement. 2

What will you learn at this seminar? Which procedural rules are necessary to ensure sound management of public procurement How to discover unfair competition How to structure the audit of public procurement What are the best costing practices in public procurement? How to assess the risks in every stage of the procurement process How to accept and control risks How to conduct a review of controls to ensure value for money in the procurement process What are the different methods to audit public procurement? Which questions do you have to raise when conducting an audit of public procurement How to use the right investigation methods to support evidence How to review a procurement fraud How to handle industry standards in public procurement What is important when auditing public procurement of IT / telecom services and investment banking? How can IT infrastructures facilitate public procurement audits? Your benefits Benefit from best practice reports of high quality European and international Audit Divisions Increase the effectiveness and efficiency of your methodology and services Ensure value for money and avoid reimbursements Learn from the best investigation methods and ensure that your procurement follows legal standards Be prepared Learn how to prevent and detect the risk of fraud and corruption Discuss your challenges with our experts and receive practical hints on how to proceed in practice Network and exchange experiences with our experts and other professionals working in the field of procurement audit How to establish an effective follow-up programme in public procurement How to make sure that auditor s recommendations are followed Very well prepared. Aurimas Miškinis, Deputy Head, National Audit Office, Lithuania Very productive. Aida Hasanova, Project Officer, German Agency for International Cooperation (GIZ), Baku, Azerbaijan 3

PROGRAMME DAY 1 How to Audit Public Procurement Effectively 8.30-9.00 Registration and Hand-out of Seminar Documents 9.00-9.05 Opening Remarks from the European Academy for Taxes, Economics & Law 9.05-9.30 Welcome Note, Round of Introductions and Opening Discussion Participants expectations Current biggest risks, threads and challenges in procurement audits Discussion on participants challenges: - What are your most important questions in regard to procurement audits? - What is specific about your organisation s audits? - What are your biggest constraints when auditing procurements? David Johnson, Inspector General, Office of Inspector General, United Nations World Food Programme (WFP) 9.30-10.15 Auditing Costing Practices in Public Procurement Assessment of the control environment as a prerequisite for the identification, evaluation, and mitigation of costing risks Systematic review of the process for estimation of contract volume: the importance of the cost matrix and the budget breakdown Evaluation of the practices targeting verification of contractors economy and efficiency of operations Practical approach towards the examination of the cost performance of the procurement system: key performance indicators (KPIs) David Johnson, Inspector General, Office of Inspector General, United Nations World Food Programme (WFP) 10.15-10.30 10.30-11.00 Coffee Break and Networking Opportunity 11.00-11.45 Auditing Procurement in an UN Agency and Third Party Risk Characteristics of Procurement in the UN System Auditing Procurement in the UNs Third Party Risk management and Procurement Framework Contracts Challenges David Johnson, Inspector General, Office of Inspector General, United Nations World Food Programme (WFP) 11.45-12.00 DAVID JOHNSON Inspector General, Office of Inspector General, United Nations World Food Programme (WFP) David Johnson has been an Auditor and Accountant for more than 20 years including international experience in oversight, risk management, counterfraud, financial management, corporate governance and control systems. As the Inspector General of one of the largest UN organisations, his office is responsible for internal audit, assurance and investigations. Before joining the World Food Programme as Inspector General, he acted as Deputy Director and Head of Internal Audit and Counter-Fraud Department at the UK Department for International Development (DFID). In this role he has been providing leadership of audit and counter-fraud service (fraud prevention and fraud intelligence) as well as delivering risk management advice and audit opinion focused in developing and fragile countries. Previous to this, the Inspector General has worked in the private, non-governmental sector as well as in the European Commission. 12.00-12.45 Audit of Public Procurement by the European Court of Auditors (ECA): Audit and Context The role of ECA as opposed to the Commission and Authorities in the Member States Focus of ECA in relation to public procurement ECA auditing public procurement Niels-Erik Brokopp, Head of Unit Audit, Employment and Social Affairs - Financial Audit, European Court of Auditors (ECA) 12.45-13.00 13.00-14.00 Lunch Break and Networking Opportunity 14.00-14.45 Examples and Results: The European Court of Auditors Experience Procurement cases Typical public procurement errors found by ECA Overall results Outlook for the 2014-2020 programming period Niels-Erik Brokopp, Head of Unit Audit, Employment and Social Affairs - Financial Audit, European Court of Auditors (ECA) 14.45-15.00 With Concrete Examples 4

15.00-15.45 Auditing Compliance with Procurement Process The Example of the European Central Bank (ECB) The concept of risk in the procurement process Centralisation or decentralisation in the procurement process Mapping the end to end process Reviewing the effectiveness of controls Duncan Cripps, Principal Auditor, Audit Missions Division, European Central Bank (ECB) 15.45-16.00 16.00-16.30 Coffee Break and Networking Opportunity Workshop 16.30-17.30 Auditing Compliance in the Procurement Process Having looked at the various tools available for mapping in the previous sessions, the participants shall break out into groups to each try and map the procurement process in the participants organisations. Regulatory compliance Administrative Compliance and best practice Procurement risks Mapping the process The participants will work in small groups and look at the internal / external interfaces and attempt to identify key controls throughout the process. NIELS-ERIK BROKOPP Head of Unit Audit, Employment and Social Affairs - Financial Audit, European Court of Auditors (ECA) Since 2008, Niels-Erik Brokopp is Head of Unit Audit Supervision and Support for Financial & Compliance Audit at the European Court of Auditors (ECA), responsible for quality assurance for the Directory of Assessment Standards (DAS) and methodology for compliance audits and involved in the INTOSAI standard setting process (ISSAI 100 to 400). He previously worked as Team Leader for quality assurance and Auditor and before as Performance and Compliance Auditor within Regional Development and Cohesion Fund and Administrative and other expenditure of the European Court of Auditors in Luxembourg. DUNCAN CRIPPS Principal Auditor, Audit Missions Division, European Central Bank (ECB) Duncan Cripps has been working as Principal Auditor at the European Central bank since 2005. His key duty is the provision of oversight of the successful delivery of the new USD 1.6bn landmark headquarters office building in Frankfurt am Main for the European Central Bank. Duncan Cripps has provided oversight from the permit stage through to the construction and testing and commissioning stages. Duncan Cripps was previously Head of EMEA Account Project Management for an international management company specialising in real estate. He delivered capital construction projects (offices) and fit-out works for international Forbes 500 clients without significant time or budget variance. Duncan Cripps, Principal Auditor, Audit Missions Division, European Central Bank (ECB) 17.30-17.45 17.45 End of Day one 5

PROGRAMME DAY 2 How to Audit Public Procurement Effectively 9.00-9.10 Welcome Note from the Chair Carsten Kyhnauv, Director, Internal Audit Department, Ministry of Defence, Denmark 9.10-10.00 How to Structure a Public Procurement Audit? Importance of organisational understanding of audit of public procurement Create value Procurement with a strategic, tactical and operational point of view for the organisation and for the internal auditors How to structure the internal audit of public procurement The need for involving the organisation in the internal audit How deep and wide will or can the internal audit do auditing of public procurement? Identifying the risk of fraud in the procedures for public spending Key points in reporting the result of the internal audits work with public procurement Use of key ratios in connection with public procurement Carsten Kyhnauv, Director, Internal Audit Department, Ministry of Defence, Denmark 10.00-10.15 CARSTEN KYHNAUV Director, Internal Audit Department, Ministry of Defence, Denmark Since 2006, Carsten Kyhnauv is Director of Internal Audit in the Ministry of Defence in Denmark where he is now responsible for the internal auditing of the Danish Defence and Danish Home Guard. In this role he has gained vast experience in auditing huge and complicated public procurements for example investments in navy ship borne helicopters, warships, and armoured personnel carriers. He is a member of the group executive management team in the Ministry of Defence, and also confidential adviser on financial management to the top management team within the Danish Defence and Danish Home Guard. Moreover, Carsten Kyhnauv has far-reaching academic experience from his part time work as assistant professor at the Copenhagen Business School (since 1985 now) and at the University of Southern Jutland (since 1995 now), Institute of Accounting & Auditing. He also has expertise in the finance sector: He started his career as Banker and has been Senior Vice President as a Merchant Banker in a large Danish Bank. Following this position he was appointed as CFO in the City of Copenhagen at the Department for Children and Youth Administration. 10.15-10.45 Coffee Break and Networking Opportunity 10.45-11.45 Using Investigation Methods to Support Evidence The balance between the internal auditor as an auditor and a criminal / police investigator Forensic auditing - risk understanding - risk acceptance - risk control How does the internal auditor work against producing and securing evidence Homework and on the site? Steps in the work of an internal auditor to document evidence NOT produce evidence How does an internal auditor prepare the presentation of the evidence to the company and/or the person? How does the internal auditor work together with the police / court? How do the internal auditor and the company / department secure that processes in the future can avoid or reduce the possibilities of fraud Carsten Kyhnauv, Director, Internal Audit Department, Ministry of Defence, Denmark 11.45-12.00 12.00-13.30 Lunch Break and Networking Opportunity Very interesting seminar: a lot of new information and connections. 6

13.30-14.30 Accepting or Challenging Industry Standards? The Role of the Auditor in Guiding Governments with Complex Services and Products The case of investment banking services in the sale of state owned companies The case of framework agreements The case of railway infrastructure maintenance Dimitrios Ioannidis, Audit Coordinator, Performance Audit Department, Swedish National Audit Office 14.30-14.45 14.45-15.30 Use of IT in Public Procurement Audits Use of IT in the planning and implementation of audit - Planning : Procurement data analysis, determination of questionable procedure or purchase families, sample selection - Audit implementation: Compliance audit of tender and operational audit of procurement execution Results of audits (initial and follow-up) Findings with regard to - The procurement information system - Auditing methods Pascal Penaud, Inspector General, General Inspection of Social Affairs (IGAS) an Inter-Ministerial Audit and Evaluation Office for Social and Health, Employment and Labour Policies, France 15.30-15.45 15.45-16.00 End of Seminar and Handout of Certificates With Concrete Examples DIMITRIOS IOANNIDIS Audit Coordinator, Performance Audit Department, Swedish National Audit Office Since 2006, Dimitrios Ioannidis is Audit Coordinator at the Swedish National Audit Office. He has audited procurement processes linked to the sale of state owned companies as well as the purchase of IT and telecom services in the government sector. In 2005, he was Secretary in a State Committee, dealing with the review of the Swedish National Premium Pension system. In this position, he has also worked with procurement. Between 2001 and 2006, he was Economist at the Financial Stability Department of the Central Bank of Sweden, and participated in the procurement of a new system for the settlement of large payments. Between 1990 and 2001, he was researcher and lecturer at the Stockholm School of Economics. His research focused on the importance of buyer / seller relationship for industrial and corporate development. The views expressed in his presentation are solely those of the speaker himself and do not represent the official position of the Swedish National Audit Office. PASCAL PENAUD Inspector General, General Inspection of Social Affairs (IGAS) an Interministerial Audit and Evaluation Office for Social and Health, Employment and Labour Policies, France Since 2003, Pascal Penaud is Inspector General at the General Inspection for Social (IGAS) which is an inter-ministerial audit and evaluation office for social, health, employment and labour policies that assists public players in making informed decisions. His experience in auditing public procurement is manifold. As Inspector General, he was responsible for auditing public procurement in various major French hospitals as well as social ministries. Moreover, Pascal Penaud also has experience in auditing public procurement as part of general audits in the hospital sector. During his membership in an inter-departmental investigation mission of the public authorities, he was furthermore responsible for compliance audits of procurement operations. The seminar was excellent, interesting presentations and lecturers; a lot of practical and useful information was shared with us. 7

ORGANISATIONAL MATTERS How to Audit Public Procurement Effectively Date of Event 22 nd 23 rd October 2015 Booking Number S-1098 Event Language The event language is English. Event Price 1.389,- Euro The above price covers the following: Admission to the seminar Hand-out documents Seminar certificate, if seminar fully attended Soft drinks and coffee/tea on both event days Lunch on both event days Upon request you can receive a digital version of the seminar documents after the event for 60,- Euro excl. German VAT (19%) in addition to the seminar. All prices excl. German VAT (19%) BOOKING E-mail: booking@euroacad.eu Phone: +49 (0)30 80 20 80 230 Fax: +49 (0)30 80 20 80 250 For online booking please visit our website: www.euroacad.eu Contact European Academy for Taxes, Economics & Law at Potsdamer Platz, Entrance Leipziger Platz 9 10117 Berlin, Germany Phone: +49 (0)30 80 20 80 230 Fax: +49 (0)30 80 20 80 250 E-mail: info@euroacad.eu Internet: www.euroacad.eu Your contact persons for the programme: Regina Lüning, M. Sc. econ. Head of Marketing and Sales Phone: +49 (0)30 80 20 80 246 Fax: +49 (0)30 80 20 80 259 E-mail: regina.luening@euroacad.eu Magdalena Hehn Conference Manager Phone: +49 (0)30 80 20 80 242 Fax: +49 (0)30 80 20 80 259 E-mail: magdalena.hehn@euroacad.eu (Programme is subject to alterations) Event Location InterCity Hotel Berlin Hauptbahnhof Katharina-Paulus-Straße 5 10557 Berlin Phone: +49 (0)30 288 755 0 E-mail: berlin-hauptbahnhof@intercityhotel.de Internet: http://de.intercityhotel.com/berlin/intercityhotel-berlin Please contact the hotel directly and refer to the European Academy for Taxes, Economics & Law if you wish to benefit from a limited number of available rooms. Of course you can always look for an alternative hotel accommodation. 8

BOOKING E-mail: booking@euroacad.eu Phone: +49 (0)30 80 20 80 230 Fax: +49 (0)30 80 20 80 250 For online booking please visit our website: www.euroacad.eu European Academy for Taxes, Economics & Law at Potsdamer Platz Entrance: Leipziger Platz 9 10117 Berlin / Germany BOOKING BOOKING NUMBER: S-1098 (PR) 22 nd 23 rd OCTOBER 2015, BERLIN Herewith we register the following persons for the Advanced Seminar for Auditors in the Public Sector: How to Audit Public Procurement Effectively. Delegate 1 Ms. Mr. First name Last name Your organisation Department Unit Job position Street Postcode / City Country Phone Fax E-mail I hereby order the digital version of the seminar documents (fee required) in addition to the seminar. Delegate 2 Ms. Mr. First name Last name Your organisation Department Unit Job position Street Postcode / City Country Delegate 3 Ms. Mr. First name Last name Your organisation Department Unit Job position Street Postcode / City Country Phone Fax E-mail Phone Fax E-mail I hereby order the digital version of the seminar documents (fee required) in addition to the seminar. I hereby order the digital version of the seminar documents (fee required) in addition to the seminar. Invoice Organisation First name Your Organisation Department Unit Job Position E-mail Ms. Mr. Last name Street Postcode / City Country Phone Fax With my signature I confirm my registration and accept the General Terms and Conditions as legally binding. I herewith agree to receive further information from the European Academy for Taxes, Economics & Law In case of registration of more than one delegate do you prefer: single invoice? collective invoice? NOTE Only Valid with Signature and Stamp. Place, Date Authorised Signature and Stamp European Academy for Taxes, Economics & Law Brauner Klingenberg GmbH Leipziger Platz 9 10117 Berlin Phone +49 (0)30 80 20 80 230 Fax +49 (0)30 80 20 80 259 9

Terms & Conditions for Conferences, Seminars and other Training Courses 1. Area of Application The following terms and conditions settle the contractual relationship between conference participants and the European Academy for Taxes, Economics & Law Brauner Klingenberg GmbH [referred to as European Academy for Taxes, Economics & Law in the following]. Differing terms and conditions, as well as, other settlements and/or regulations have no validity. 2. Registration / Confirmation of Application A registration can be made via internet, mail, fax, or email. The registration is considered granted and legally binding if not rejected by the European Academy for Taxes, Economics & Law in writing within seven (7) days after receipt of registration. The registration will be supplemented by a booking confirmation via email. Partial bookings are only valid for seminars designed in modules. 3. Service The course fee covers the fee per participant and course in net, subject to current German VAT. It includes training course documents as per course description, a lunch meal/ snack and refreshments during breaks, as well as, a participation certificate. The European Academy for Taxes, Economics & Law has the right to change speakers/instructors and to modify the course program if and where necessary while maintaining the overall nature of the course. All registered participants will be notified in case of a course cancellation due to force majeure, due to speakers preventions, due to troubles at the chosen location or due to a low registration rate. Course cancellation notification due to a low registration rate is issued no later than two (2) weeks before the course date. Course fees are reimbursed in the cases listed above; however, reimbursement for travel expenses or work absenteeism is only granted in cases of intention or gross negligence by the European Academy for Taxes, Economics & Law. Any reimbursement of travel expenses are to be considered as an exceptional goodwill gesture and form no future general obligation. In case of disturbances and/or interruptions, the European Academy for Taxes, Economics & Law commits itself to solve or limit any problems that might occur in order to maintain and continue the course as planned. 4. Payment Date and Payment, Default of Payment Payment of the course fee is payable immediately upon receipt of invoice. Where payment is not received or lacking clear assignment to a participant prior to commencement of the course, the European Academy for Taxes, Economics & Law may refuse the relevant participant s participation in that course. The course fee, however, is still due immediately and can be claimed as part of a dunning procedure or legal action. In accordance with BGB 247 (1), in case of default of payment within the stipulated time period, default interest on arrears of at least 5% above the ECB base rate is due and payable. The European Academy for Taxes, Economics & Law can claim higher damage for delay if and where proven. Equally, the participant may prove that a damage has not occurred or has had less effect than estimated by the European Academy for Taxes, Economics & Law. Payment shall be made by cashless bank transfer; cash or cheques will not be accepted. The European Academy for Taxes, Economics & Law is not liable for any loss of means of payment. The participant may only offset such claims against the European Academy for Taxes, Economics & Law s as are undisputed, legally recognized or recognized in writing by the European Academy for Taxes, Economics & Law. The right of retention is only acceptable in accordance with a counterclaim based on the same contract. 5. Cancellation Cancellations need to be issued in writing. Cancellation by the participant will be subject to cancellation charges as follows: 30 days or more prior to commencement of the course: service charge of 80,00 net, subject to current German VAT, payable immediately, course fee will be reimbursed, two (2) weeks to 30 days prior to commencement of the course: 50% of course fee net, subject to current German VAT, payable immediately, non-attendance or cancellation less than two (2) weeks prior to commencement of the course: 100% of course fee net, subject to current Germany VAT, payable immediately The European Academy for Taxes, Economics & Law gladly accepts without additional costs a substitute participant nominated in case of a cancellation if the substitute participant is registered at least three (3) days prior to the commencement of the course. Neither cancellation of a specific module/part of the course or substitution per module/per day is possible. 6. Copyright Seminar/course documents are protected by property rights and may not be duplicated, processed, amended, circulated or published in any other way without the written consent of the European Academy for Taxes, Economics & Law. The European Academy for Taxes, Economics & Law reserves all rights. 7. Liability All seminars and courses are prepared and presented by qualified speakers and instructors. The European Academy for Taxes, Economics & Law accepts no liability for the upto-dateness, correctness and completeness of the seminar documentation, as well as, presentation of the seminar. 8. Applicable Law, Place of Jurisdiction, Place of Performance All cases shall be governed and construed in accordance with German law to the exclusion of the UN Sales Convention. As far as legally admissible, place of performance and place of exclusive jurisdiction shall be Berlin, Germany. 9. Data Protection The European Academy for Taxes, Economics & Law protects personal data by taking appropriate protection measures. For the purpose of optimization of the product and service portfolio and according to the regulations of the data privacy laws, it stores and processes person-specific data on the training participants. Hence, all European Academy for Taxes, Economics & Law website hits are registered. All personal data will, in accordance with the law, be used for documentation requests, placed orders or other enquiries in order to send information out by post. The European Academy for Taxes, Economics & Law will, in accordance with the law, inform participants by email about special offers that resemble previously booked seminars. If and where personal data needs to be transferred to countries lacking appropriate data protection schemes, the European Academy for Taxes, Economics & Law shall grant alternative adequate protection. Furthermore, the European Academy for Taxes, Economics & Law will use personal data as far as participants have granted respective permission. When collecting personal data, the European Academy for Taxes, Economics & Law will always ask for permission regarding email information about offers. The participant may, at any time, express their objection to data collection for the purpose of advertisement or address via email or fax. Any data provided to the European Academy for Taxes, Economics & Law will be processed for reservations and bookings, as well as, for information about other seminars. Names and company names will be published in a participants list and forwarded to the mailing company. 10